International Trader - Asia

Korea's WhatsApp Deal

Linked, Kakao Talk and Daum will be a big competitor in Asia. The new company will be profitable and grow—and Daum shares are cheap.

The merger mania in messaging has reached Korea, creating a formidable new competitor both within the country and across Asia.

Seoul-based portal operator Daum Communications (ticker: 035720.Korea) last week agreed to join with fast-growing local instant-messaging firm Kakao Talk. The combined entity will have a market valuation of more than $3.2 billion and will try to unseat much larger Naver (035420.Korea) and its thriving messaging-service Line. In a reverse takeover, closely held Kakao is buying listed Daum in a stock...